We want 50-50, say some states

On the face of it, the 13th Finance Commission has recommended a higher share of the divisible pool from Central resources to states, but regional governments gave muted reaction on Thursday, as a call to return to a zero-revenue deficit regime by 2011-12 carried a message that could imply spending cuts and taxation.

On the face of it, the 13th Finance Commission has recommended a higher share of the divisible pool from Central resources to states, but regional governments gave muted reaction on Thursday, as a call to return to a zero-revenue deficit regime by 2011-12 carried a message that could imply spending cuts and taxation.

Most states are struggling with huge deficits due to the implementation of the Sixth Pay Commission.

Asim Dasgupta, finance minister, West Bengal and chairman, empowered group of state finance ministers, said, “The states have to handle 80 per cent of the development activities and the Centre collects two-thirds of the tax revenue. The states had demanded a 50 per cent share of the Central tax revenue. Unfortunately, it has been an insignificant increase.”